VA Loan for Veterans

VA Loan for Veterans

A VA Loan for Veterans

What is a VA Loan for Veterans?

Are you a veteran who has served in the United States armed forces in either a time of peace or war?  You quality for a VA loan for veterans.

According to Wikipedia, “A VA loan for veterans is a mortgage loan in the United States guaranteed by the U.S. Department of Veterans Affairs (VA). The loan may be issued by qualified lenders.

The VA loan for veterans offers long-term financing to eligible American veterans or their surviving spouses (provided they do not remarry).  The basic intention of the VA loan for veterans is to supply home financing to eligible veterans in areas where private financing is not generally  available.   Additionally, it helps veterans purchase properties with no down payment.


How does a VA Loan for Veterans Work?

The VA loan allows veterans 103.3 percent financing without private mortgage insurance or a 20 percent second mortgage.  It also allows for up  to $6,000 for energy efficient improvements. A VA funding fee of 0 to 3.3% of the loan amount is paid to the VA.  Additionally, this fee may be financed. In a purchase, veterans may borrow up to 103.3% of the sales price or reasonable value of the home, whichever is less. Since there is no monthly PMI, more of the mortgage payment goes directly towards qualifying for the loan amount. Consequently, this allows you a larger loan amount with the same payment.

In a refinance, where a new VA loan is created, you may borrow up to 100% of the value, as long as allowed by your state’s laws. In a refinance where the loan is a VA loan refinancing to VA loan (IRRRL Refinance), the veteran may borrow up to 100.5% of the total loan amount. The additional .5% is the funding fee for an VA Interest Rate Reduction Refinance.

VA loans allow veterans to qualify for loan amounts larger than traditional Fannie Mae of conforming loans. VA will insure a mortgage where the monthly payment of the loan is up to 41% of the gross monthly income vs. 28% for a conforming loan assuming the veteran has no monthly bills.

The maximum VA loan guarantee varies by county.  The maximum VA loan amount with no down payment is usually $417,000.  However, depending upon where you live, this amount may rise to as much as $1,094,625 in certain specified “high-cost counties”.”


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